After years of good performance. Happy homes apartment building was sold in 2002

After years of good performance. Happy homes apartment building was sold in 2002 for $20, 00,000 and the new owners refurnished all apartment units. In 2003 the apartment building was re-opened. Please analyse the income statement below and explain the income trends. The building has 1600units was built in 1971, and the current loan balance is $16,395,772. Period ended Statement classification (wi) 31/12/06 31/12/07 31/12/08 31/12/09 Occupancy 95% 90% 92% 95% Base rent $1,100,000 $990,000 $950,000 $990,000 Laundry vending $12,000 $11,000 $11,000 $30,000 Parking income $42,000 $40,000 $41,000 $60,000 Other income $3,000 $8,000 $21,000 $20,000 Effective gross income $1,157,000 $1,049,000 $1,023,000 $1,100,000

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After years of good performance. Happy homes apartment building was sold in 2002 for $20, 00,000 and..

Answer / Umesh

The provided income statement shows the revenue trend for Happy Homes apartment building from 2006 to 2009. Occupancy rates fluctuated slightly, with 95% occupancy in 2006 and 2009, and 90% and 92% in 2007 and 2008 respectively. Base rent remained relatively stable, with a slight decrease from $1,100,000 in 2006 to $990,000 in 2009. However, there was an increase in ancillary income, particularly from laundry vending and parking income, which saw a significant rise between 2006 and 2007, but leveled off by 2009. Other income sources also increased from 2006 to 2008 before slightly decreasing in 2009. Overall, the effective gross income fluctuated slightly, with a slight decrease between 2006 and 2007, followed by a recovery to the original amount in 2009.

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